Don’t fall for the freebies offered by property developers

Are the tempting packages developers offer to entice buyers just a cover for falling prices

Stacey Bell is thrilled with the incentives offered by Fairview New Homes at its Modus scheme in Ipswich  they helped her to buy a one-bedroom flat there and become a homeowner at just 19. “I paid £110,000,” she says (her father kindly went guarantor on her loan). “But the developer paid my 5% deposit for me, gave me £1,000 cashback and furnished the property with £5,000 worth of goods. It came with linen, cutlery  even a cheese grater.”

Rather less pleased about the growing tendency of developers to entice buyers with thousands of pounds’ worth of goodies is the Council of Mortgage Lenders (CML). The mortgage industry’s trade body has declared war on the practice, complaining that incentives are distorting the new-build market and putting lenders at risk of losing money if borrowers default on repayments.

When a buyer applies for a mortgage on a new-build home, the lender values